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Compare term deposit rates in New Zealand

You'll know exactly what your investment's worth with a term deposit.

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Finding the right term deposit for your situation can help you reach your savings goal faster. Here at we understand that not all investors are the same, so we’ve compared a range of term deposits with competitive interest rates and different term lengths.

Compare bank term deposit interest rates

Last updated 07 August 2020.

BankMinimum deposit3 Months6 Months1 Year2 Years3 Years4 Years5 Years
Bank of India$5,0001.10%1.50%2.30%2.15%2.15%n/an/a
Co-operative Bank$5,000n/a1.50%1.50%n/an/an/an/a
Co-operative Bank$10,0000.70%1.40%1.40%1.70%1.80%1.90%n/a
Co-operative Bank$50,0000.70%1.40%1.40%1.70%1.80%1.90%n/a
Heartland Bank$1,0000.85%1.60%1.65%2.00%1.80%1.80%1.80%
ICBC (online)$5,0000.90%1.65%1.70%1.75%1.75%1.80%1.85%
ICBC (online)$10,0000.95%1.70%1.75%1.80%1.80%1.85%1.90%
ICBC (online)$50,0001.00%1.75%1.80%1.85%1.85%1.90%1.95%

What is a term deposit and why should you invest in one?

A term deposit is an account that is opened for a certain period of time. During this period your funds are locked, so you won’t be able to access it (penalties apply if you do). Your money earns interest according to the interest rate that is stated by the financial institution when opening the account. This interest rate is fixed, meaning it won’t change throughout the life of the term. After the period has ended, you can choose to reinvest a portion or all of the funds at the interest rate stated by your bank, or you can withdraw the funds.

Term deposits are widely considered to be a safe, low-risk investment as, unlike savings accounts, they offer a guaranteed return through a fixed interest rate. Because your money is locked away, banks often offer a higher interest rate on some term deposits than they do on regular savings accounts. If you have a chunk of money you know you won’t need for a while, a term deposit could be a good option. It removes the temptation to spend the money as you’ll need to pay a fee if you wish to withdraw before the term is finished.

How to compare term deposits

Like most financial products, there is no best term deposit account. The account that suits your needs and circumstance the best is the one you should choose. But what is best for you, might not be best for someone else. You should look for:

  • A competitive interest rate
  • A duration that suits you
  • A minimum deposit amount you’re comfortable with

Compare term deposit rates based on duration

If you have a specific term length for which you want to lock away your savings and earn interest, it’s crucial to compare the different interest rates available for your desired term length.

Term deposit versus savings account

The main difference between a savings account and a term deposit is the ability to access your money. The money in a savings account can be accessed whenever you need it, and there’s no costs for withdrawing or depositing money. Term deposits are locked and will charge you if you need to withdraw your money early. So if you want easy access to your money, then a term deposit might not be right for you.

Another key difference is the interest rate; savings accounts have variable interest rates meaning they can change, while term deposits have fixed interest rates meaning the rate will not change until the term matures.

What are the downsides of a term deposit?

The downside of a term deposit is that you can’t access your money while it is in the account. If you do need to make a withdrawal you’ll need to give at least 31 days notice and you’ll be charged a fee for accessing your money before the term has been completed. You could also be charged an interest rate penalty, which could defeat the purpose of the investment in the first place. In cases of extreme financial hardship this rule can be waived.

How do I close my term deposit?

If your term deposit has reached maturity, that is, has reached the end of the agreed period then you withdraw all the funds like a regular bank account. However, if your term deposit is still maturing, then your bank will charge a penalty for withdrawing your funds early. To do this, you’ll need to get in touch with your bank directly.

Finder is not giving an opinion or making a recommendation that the user should acquire or dispose of the relevant financial product.

Read more on this topic

  • 5 year term deposits 5 year term deposits combine competitive fixed interest rates with the security of guaranteed returns.
  • 6 ways to get the best term deposit rate There are plenty of ways to maximise your term deposit rate and get yourself a better return, even in this low-rate environment.   
  • Term Deposit Calculator With the help of a term deposit calculator you get a better idea of how much you need and for how long to invest so you can meet your financial goals.
  • Business Term Deposits If you’re looking for steady returns to improve the financial position of your business, a business term deposit could be the perfect solution for you.
  • Term Deposit Accounts for Kids Your guide to finding the best term deposit accounts for kids, allowing your children to enjoy the security of guaranteed returns on the money they invest.
  • Paying Tax on Term Deposit Interest Find out all about the tax treatment of term deposit interest payments.
  • Compare 12 month term deposits A 12 month term deposit is a fuss-free way to earn a competitive interest rate on your savings. If you are able to part with your money for a year, the reward could be worth it.
  • Term deposits over one year long A term deposit can help you save and manage your personal finances to help plan for future expenditure.
  • 6 month term deposits For a Kiwi who is looking for a short-term home for their hard-earned savings, a 6 month term deposit offers security and the added benefit of a competitive interest rate.
  • 9 month term deposits Put your savings to work with a nine month term deposit that discourages withdrawals with penalties, while building your savings with a competitive fixed interest rate.
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